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Renault shares hit six-year low on rumors of Nissan split

LONDON — Renault shares hit six-year lows on Monday after a media report that Nissan has accelerated secret contingency planning for a potential split from the French carmaker, the latest sign that the downfall of former boss Carlos Ghosn is roiling the 20-year alliance. At 1027 GMT, the shares were down 3.7%, languishing at the bottom of Paris' CAC 40 and the pan European STOXX 600 index. The plans include war-gaming a total split in engineering and manufacturing, as well as changes to Nissan's board, the Financial Times newspaper reported on Sunday citing several sources. Nissan's contingency planning has ramped up since the dramatic escape of Ghosn, the former head of the Renault-Nissan  alliance, from Japan in late December, it said. The tie-up has been in management turmoil since Ghosn's arrest in Tokyo in November 2018 on allegations of financial misconduct, which he denies. He was awaiting trial in Japan when he fled to Lebanon. "We firmly believe the relationship between (Renault and Nissan) and hence the Alliance is broken and is likely beyond the point of repair," Evercore ISI analysts Arndt Elinghorst and Chris McNally wrote in a note on Monday. They have an 'underperform' rating on the French car company. Renault was not available for immediate comment. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. Earnings/Financials Mitsubishi Nissan Renault

Japan prosecutors seek 2 years in prison for ex-Nissan exec Greg Kelly

TOKYO — Japanese prosecutors demanded two years in prison for former Nissan executive Greg Kelly and accused him of joining a “conspiracy” to pay his former boss Carlos Ghosn illicitly in closing arguments Wednesday in a yearlong trial. “That unpaid compensation existed is clear,” prosecutor Yukio Kawasaki told the Tokyo District Court, reading briskly from a thick document. Kelly, a 30-year veteran at the Japanese automaker, was living in the U.S. when he was arrested in November 2018 upon returning to Japan to attend a meeting. The first American to be appointed to NissanÂ’s board, Kelly says he is innocent. He sat calmly in the courtroom, wearing his usual red tie and dark suit, alongside defense lawyers. Everyone in the courthouse was wearing a mask because of the pandemic. Kelly told The Associated Press in an interview last month he did not know all the details of GhosnÂ’s pay. He was determined to retain Ghosn, Nissan's former chairman, because of his extraordinary management skills and wanted to pay him in a legal way, he said. Ghosn was arrested at the same time as Kelly and also maintains he is innocent. He skipped bail in late 2019 and fled to Lebanon, the country of his ancestry. It has no extradition treaty with Japan. The charges center around a pay cut of about 1 billion yen ($10 million) a year that Ghosn voluntarily started taking from 2010, halving his pay after disclosure of high executive pay became mandatory in Japan. Nissan Motor officials considered various ways to make up for the money Ghosn gave up, such as paying him consulting fees after retirement. They also mulled other methods such as payments through subsidiaries and stock options. Nothing had been paid at the time of the arrests. The contention is over whether that money should have been reported as compensation as a de facto promised sum under a binding contract, or didnÂ’t need to be disclosed until it was finalized. Ghosn has said a group at Nissan engineered his arrest because they feared that French automaker Renault, which owns 43% of Nissan, would gain more control over the company. Other Nissan officials made similar comments during KellyÂ’s trial. Renault sent Ghosn to Nissan in 1999 to lead its rescue from the brink of bankruptcy. He successfully steered the maker of the Leaf electric car and Infiniti luxury models for nearly two decades.

Facts point to legal violations by Carlos Ghosn, says Nissan external review

YOKOHAMA, Japan — An external committee reviewing governance at Nissan Motor Co said on Wednesday there were enough facts to suspect violations of laws and the private use of company funds by ousted chairman Carlos Ghosn. Following a three-month audit of Nissan's governance after a scandal that shook the global auto industry, the committee put the blame squarely on what it called Ghosn's concentration of power. It also acknowledged Nissan CEO Hiroto Saikawa's role in Ghosn's salary arrangement at the heart of the scandal. Twenty years to the day since French automaker Renault SA agreed to rescue Nissan, the committee described a corporate culture at Nissan "in which no one can make any objections to Mr. Ghosn," who was "in a way deified within Nissan as a savior who had redeemed Nissan from collapse." A representative for Ghosn replied in a statement that the allegations made against the former Nissan chairman "will be revealed for what they are: part of an unsubstantiated smear campaign against Carlos Ghosn to prevent the integration of the Alliance and conceal Nissan's deteriorating performance." The group issued 38 recommendations to bolster Nissan's governance, including that top executive positions at the Japanese car maker should not be held by people serving in executive positions at Renault or junior partner Mitsubishi Motors. It also proposed that the majority of directors, including the chairman of the board, be independent, outside directors and that the role of company chairman be abolished. Responding to the committee's comments, Saikawa told reporters on Thursday that Nissan would seriously consider the committee's recommendations, which he characterized as "tough." Saikawa, who was speaking outside his home, did not specifically address his responsibility in the scandal but has previously said that top management, including himself, were responsible for weak governance which led to the misconduct. The recommendations from the external, seven-member committee came weeks after Nissan and Renault said they would retool their alliance, one of the world's biggest automaking groupings, to break up the all-powerful chairmanship previously held by Ghosn. "There are facts sufficient to suspect violations of laws and regulations, violation of internal rules and private use of company funds and expenses ... by Mr. Ghosn," the committee said in its report.